Friday, 16 January 2015

Damages for breach of EU free movement law: an important Irish judgment

Steve Peers

It’s been well over twenty years
since the CJEU established, in the case of Francovich,
that individuals could sue Member States in damages for breach of EU law. Yet many
of the cases concerned have been brought by businesses for lost profit. The
CJEU has never had the opportunity to apply the principles relating to damages
claims in a case concerning the free movement of EU citizens.

But in its recent judgment in Ogieriakhi, the Irish High Court delivered
a ruling on this issue, awarding over €100,000 to the family member of an EU
citizen for breach of EU free movement law. This judgment isn’t a precedent as such outside Ireland, but it
is a useful indication of how such claims might be made. So I suggest below how it might be particularly relevant to some of the UK's current breaches of EU free movement law.

Background

The Irish judgment follows the
CJEU’s ruling earlier last year in the same case (discussed here), which
answered the High Court’s questions as regards substantive free movement law
and damages issues. Mr. Ogieriakhi had been married to a French citizen in Ireland,
then separated from her for several years while living with an Irish woman.
Ultimately he got divorced from his French wife, married the Irish woman he had
established a family with, and became an Irish citizen.

But in the meantime, he lost his
job in the Irish post office, purely on the grounds that he was not legally
entitled to be employed. He had been denied a renewed residence permit and had
failed in his application to be considered a permanent resident on the basis of
the EU citizens’ Directive, which awards that status to third-country national
family members of EU citizens after five years’ legal residence.

In light of developments in CJEU
case law, he brought a claim for damages for loss of his job, which was the
basis for the High Court asking the CJEU to clarify the substantive free
movement law and damages issues. The CJEU ruled, following prior case law, that
(a) third-country national family members of EU citizens still had free
movement rights as long as the marriage was not formally dissolved, and (b) permanent
residence could be acquired on the basis of time spent entirely before the
deadline of 30 April 2006 to apply the EU citizens’ Directive, which created
the notion of permanent residence. The Irish implementation of the Directive
had taken a more restrictive approach on the latter point.

The national judgment

The CJEU judgment makes clear
that Mr. Ogieriakhi was entitled to permanent residence status. However, while
this will be relevant by analogy in similar cases, it was no longer directly relevant
to his immigration status, since the
Irish government had awarded him not only permanent residence but also
citizenship in the meantime. On the other hand, it was very relevant to his
claim for damages.

The High Court judge, Gerard
Hogan, applied the EU law principles relating to damages. Mr. Ogieriakhi had to
show that: the EU rules conferred rights upon him; the breach of EU law was
sufficiently serious; and there was a direct causal link between the breach of
EU law and the damages suffered. The CJEU judgment in this case had clarified
one aspect of the second point: the mere fact that the national court had asked
the CJEU for interpretation of EU law did not as such mean that the breach of
EU law was not sufficiently serious.

Applying the principles in turn,
the permanent residence rules in the citizens’ Directive aimed to confer rights
on individuals. On the second point, the case law of the CJEU on damages says
that there must be a manifest and grave disregard of the limits of Member
States’ discretion, considering the clarity and precision of the rule breached,
the degree of discretion left to Member States, whether the breach was
intentional or excusable, the position of EU institutions and the existence of
prior case law of the CJEU on the issue. A continuation of national breaches of
EU law after a CJEU judgment will always constitute a sufficiently serious
breach. In this case, Judge Hogan ruled that: the EU legislation was clear and
precise; there was no national discretion; and the breach was not excusable,
even though the CJEU did not confirm that pre-2006 periods of residence counted
until 2010, since this should have been clear enough from the wording of the
Directive. Finally, it was clear on the facts that Mr. Ogieriakhi only lost his
job due to the breach of EU law.

The judge then had to assess the
amount of damages payable. Mr. Ogieriakhi had been unable to find work in the
difficult economic climate in Ireland, and so was able to claim for several
years’ lost wages. To a limited extent, he had failed to mitigate his losses,
and so the award was reduced a little as a consequence. The final result was
six years’ lost wages, amounting to €107,905, along with a further €20,000 for
breach of Irish constitutional law (right to a good name).

Comments

This judgment shows how
significant EU law can be in individual cases, in particular in the area of
free movement of people. €127,000 is a small sum for a large corporation but a substantial
amount for people of modest means, like the Ogieriakhi family. Moreover, Mr.
Ogieriakhi doesn’t have to share any of this sum with lawyers, since he
represented himself (congratulations to him for his success – and to those in
Ireland who obviously taught him EU law very well). Of course, the award shouldn’t
be regarded as an unjustified windfall, since it mostly constitutes money that Mr.
Ogieriakhi would have earned if he had not been unlawfully dismissed due to
breach of EU law.

What are its broader
implications? Let’s examine them by applying this case to two other EU free
movement issues: the position of EU citizens who move to another Member State
to be with their family members, and then seek to return to their own Member
State with their family; and the position of those who wish to visit the UK with
their third-country national family members, without obtaining a visa.

For the first category of people (often
known as Surinder Singh cases), the
CJEU clarified last spring (as discussed here) that in principle it should
be sufficient for them to spend three months in another Member State exercising
free movement rights with their family members. Then they could return to their home state.
The CJEU judgment concerned a Dutch case, and I don’t know what the consequences
have been in the Netherlands. But the UK government has continued to apply a ‘centre
of life’ test that seems to be clearly more restrictive than the test in the Court’s
judgment.

For the second category of cases,
the CJEU ruled in December in McCarthy
(discussed here) that the family members should not have to obtain a
visa, if they had a residence card in their country of origin issued to family
members of EU citizens. This was a UK reference, but the UK courts have not followed
it up yet. Nor has the UK government changed its practice, as far as I know.

So let’s apply the EU damages
principles to these two breaches of EU law. In the first case, the right to
return to the UK is based on the Treaty rules on free movement of people, which
clearly aim to confer rights on individuals. Any delay in returning to the UK
with family members is in principle caused by the UK’s wrongful application of
EU law, although there might be other reasons in individual cases why people
delayed their return (finding work back in the UK, finishing school years, and
so on). As for the ‘sufficiently serious’ requirement, it is clearly met since
the Court’s ruling last year, but it harder to argue that it applied before
that date, due to the lack of legislation on this issue and the lack of clarity
before the Court’s judgment. The calculation of damages due to the UK’s breach
of EU law will depend on each case, and it might be harder in many cases to
show losses as compared to the Ogieriakhi
judgment, where the total absence of work was solely attributable to breach of EU law, and the resulting damages were fairly easy to calculate.

In the second case, the right to
visit the UK without a visa is clearly a rule intending to confer rights on
individuals. Any costs incurred to get a visa (mainly travel to a consulate)
are clearly directly attributable to the breach of EU law by the UK. The breach
of EU law is sufficiently serious since the McCarthy
judgment, but in this case it is arguably sufficiently serious beforehand. It
is blatantly obvious from the wording of the citizens’ Directive that
third-country national family members with a residence card do not need a visa,
and there is no provision in the Directive for the UK practice of requiring a
family permit as a separate requirement for a visa exemption. Equally it was clear
from prior CJEU case law that the concept of ‘abuse of rights’ could only apply
in individual cases.

As always on this blog, the suggestions
above do not constitute legal advice, and anyone considering legal action
should consult a lawyer (unless they are sure that they can represent themselves as well as Mr.
Ogieriakhi did). I don’t practice law, so this isn’t an attempt to drum up work
for myself. Rather my concern is not only for the individuals who ought to be
compensated for the losses caused by the illegal actions of the UK, but also
for the broader principle of the rule of law. It simply is not acceptable for
the UK government to flout its legal obligations as long as it has, and the
more legal proceedings aiming to pressure it to comply with those obligations,
the better.

2 comments:

This is indeed an important judgment. Thank you for this analysis. The broader implications are very interesting. I wonder if the court in other EU countries such as The Netherlands will come to the same conclusion in a similar case.